The Greek Financial Crisis

3386 words 14 pages
The Greek Financial Crisis

Ever since the end of 2009, Greece has been involved in a financial and economic crisis that has been record breaking and shattered world records in terms of its severity and worldwide effects. The Greek government, since the beginning of the crisis, has attempted to take several governmental measures to try and “stop the bleeding,” including economy policy changes, dramatic government spending and budget cuts and the implementation of new taxes for citizens. In addition to this, the government has tried to alter the perceptions of Greek government and economy by the rest of the world in an effort to appear both more liberal and more democratic. Greece has also been working to privatize many previous
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Debt continued to build, and inefficiency continued to increase rapidly. Another important factor to discuss is the massive amounts of de-industrialization that occurred in Greece during the 1980s. This means that labor was outsourced to different countries outside of the European Union where labor costs were significant cheaper, in an attempt to reduce expense margins. Instead of investing in a strong public sector, Papandreou poured money into the private sector that was clearly diminishing in relation to other countries. As a result of this, the public sector continued to expand as a compensation method for the failing private sector. This resulted in the creation of a socialist culture in Greece, causing more and more debt to buildup to an alarming level. This wastefulness and inefficiency in the extremely large public was simply adding fuel to the fire that would come back to hurt the nation several years later, as we can see. As the level of national debt and borrowing was increasing, it can be said that the bubble began to burst in the early 2000s when the Euro was adopted in Greece. This provided Greece with an opportunity to capitalize on very low interest rates, declining from roughly 20% in the early 1990s to roughly 3.2% in 2005. This fueled the fire in the sense of the borrowing culture that had already been in

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